Inflation! Inflation! Inflation has been a household topic everywhere basically due to the high living standards worldwide
Although this is not pleasant; as inflation erodes the wealth of investors over time, it does work to our advantage to us land owners! This is because un like traditional investments whose returns fluctuate with market performance, real estate returns have minimal variance and as the value increases over time, they provide a source of stable and consistent returns
Exciting… right??
There are some things that we had mentioned on our previous MUST read blog on some of the things to consider when purchasing a piece of land which you should take a read on as some of those factors affect land appreciation rates
Also, Real estate investors make money through rental income and profits generated by business activities that they are doing depending on the property- passive income
Did you know of plots Leverage? Financial leverage results from using borrowed capital as a funding source when investing to expand the firm’s asset base and generate returns on risk capital. Leverage is an investment strategy of using borrowed money—specifically, the use of various financial instruments or borrowed capital—to increase the potential return of an investment.
Real estate is great investment opportunity which goes without say that everything good also comes with that flipside. Although the good definitely outweighs the bad, let us look at some of the cons of investing in land;
Capital- just as any other business investing in land also requires starting capital which refers to basically the fee used to purchase the land
Land that is for sale takes time to sell. Time essence is of a disadvantage in terms of getting your profits back
Location – Location is key when investing in plots for sale! Your property probably won’t increase in value if it isn’t located in a community where pots on sale prices are on the rise. Due diligence is very important when selecting where to purchase a piece of land.
Now that you know the ups and downs of real estate investing, are you ready to buy your first value added plot for sale??
